The Toyota Prius’ History May Paint A Picture Of Tesla’s Future

LOOKING BACK AT THE TOYOTA PRIUS FORESHADOWS THE FUTURE FOR TESLA

For those interested in Tesla, there are valuable lessons to be learned from Toyota‘s history. Whitelaw Reid (via UVA Today) turns his attention to the Toyota Prius case study. Why? The history of Toyota’s Prius may uncover tell-tale clues about the electric vehicle future and, in particular, Tesla. He notes, “Two decades ago, Toyota’s Prius sedan rolled out of factories and into Japanese showrooms, becoming the first mass-produced gasoline/electric hybrid in an automotive landscape dominated by internal-combustion fuel engines. ”

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

However, the advent of hybrid tech took time. Reid adds, “It didn’t happen overnight. The company describes the 1997 Prius as the ‘culmination of a concerted, five-year effort by Toyota Motor Corporation to develop and bring to market a practical, low-emission family vehicle.’ In the end, that commitment to innovation led to business success and a more environmentally friendly design.”

Fast forward to the present and “the iconic Prius today remains the world’s best-selling hybrid vehicle in a relatively crowded segment of automobiles. In business terms, hybrid technology is mature, even if it took 20 years. Now, the next generation of vehicles has begun to rise… consumer demand is surging for the fully electric Tesla.”

Above: A look at the earlier design of the Toyota Prius (Image: Wikipedia)

Michael Lenox, a professor at UVA’s Darden School of Business, “expects a complete evolution from gasoline to hybrid to electric technology that could result in zero-emission vehicles in the decades ahead.”

Looking back at the Prius case study, “In 2000, Toyota sold 5,500 Prius models. By 2005, the figure had climbed to 100,000 annually in the United States. Today, global Prius sales have surpassed 3.5 million, and the Batten Institute report concludes that hybrid gas/electric vehicles have effectively created a bridge from gasoline-only to fully electric vehicles.”

This begs the question: “Will fully electric vehicles experience a similar growth curve? In 2016, Tesla’s more affordable Model 3 arrived to market with a waiting list of more than 400,000 customers.” The Batten Report also points to the dominant sales Tesla is experiencing in the EV sector: “By 2016, the Tesla Model S increased its lead over the Nissan Leaf and together with the Model X represented more than 50% of U.S. electric sales.”

Above: Notice the outsized sales Tesla has within the U.S. plug-in EV sector (Image: Batten Report)

Rebecca Duff, Lead Researcher at the Batten Institute, explains, “This is happening quicker than people think. Battery electric cars are reaching a tipping point in terms of cost-competitiveness… and projections are looking very favorable – even without federal support. I don’t think the average consumer truly understands the speed of adoption.”

Lenox agrees. “As I like to say, disruption always seems like it’s never quite here – until it is,” he said. “And then it seems to come pretty quickly.”

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37 Comments on "The Toyota Prius’ History May Paint A Picture Of Tesla’s Future"

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David Murray

There are certain parallels, yes. However, the Prius has always had a stigma of “treehugger” attached to it, combined with being known for being slow. And while I’ve owned several Prius in the past, I recognize that they only appeal to people who either want great fuel economy or people who are tree huggers. With EVs, we have the ability to move into the mainstream far more than the Prius ever did.

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3 months ago

Bunny

The other thing both Toyota and Tesla have been truly successful in making their customers very loyal customers.

For all the Prius plusses and minuses, that car still has a great following loyal customer base. At least the newest Prius has a plug available now.

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3 months ago

Pjwood1

Toyota didn’t have other major OEMs pulling out of the hatchback market, when Prius launched.

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3 months ago

Why Not?

I agree with David. I have owned two Prii in the past (Gen. 2 & 3) and loved them both, I always wished they had more power and more all-electric range though. Now I am on my 2nd Volt (both Gen. 1) and it has great power, but I still wish it had more electric range. Our next car will definitely be an EV.

I think that the Prius, and hybrids in general, are a great way for the mass market consumer to experience how great electric driving can be, which will eventually lead them down the road to a pure EV. Hopefully, there are many others who will skip this step and jump right into EVs. I think Tesla plays a great role in that, as it has made EVs sexy and desirable even to car enthusiasts.

Hybrids were never able to reach more than 3% of sales in the US, but I think it will be very different with Plug-Ins. They are already growing much faster than hybrids ever did and have a good chance to eventually displace ICE vehicles. Hopefully sooner rather than later.

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3 months ago

Mikael

As a European the Prius feels like one of the most overrated vehicles. It was pretty good 20 years ago but has been beaten by diesels for more than a decade. It had it’s glory days in 2008-2010 when it sold just over 40 000 per year, a number that didn’t even put it into the top 100 selling models. The Prius should have been a plug-in hybrid by 2006-2007 and a BEV by 2010 to not have faded away from relevance like it’s done in most places. Now it’s just a washed up ICE-coverted PHEV with too little range and a little too late. I remember the first time I drove a Prius, I think it was in 2005. It was pretty cool, a bit futuristic but not really that much of a deal. Not like the first time I rode in an all electric car as a kid, I remember that as much cooler but then as a kid most emotions are larger. First time I was truly blown away was four years later. My (already by then) unhealthy Tesla obsession made sure that I had to experience the first Roadster in my country. It was at that… Read more »

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3 months ago

john1701a

>> Now it’s just a washed up ICE-converted PHEV with too little range and a little too late. From a mainstream perspective here in the United States, there is literally nothing to support such a claim. Tax-Credit dependency is the most obvious reason why. Another reason is how tiny sales actually are still even with them. Infrastructure is only in its infancy too. Prius Prime is first of the truly affordable plug-in hybrid choices, with many more on the way. Next year, Toyota will rollout the plug-in hybrid Corolla for the market in China. We will likely get something to follow shortly after that… either a mid-cycle update for Prius itself or one of the other hybrids introducing a plug. Think about what our SUV-obsessed market here would do for a RAV4 hybrid with a PHEV option. As for the market in Europe, your own obsession with Tesla doesn’t really reflect the efforts of automakers there. We’ll see a variety of types of offerings from VW and BMW. Renault will likely continue to follow parent-company Nissan in the pursuit of affordability too… just like Toyota intends with its first mainstream EV. Mitsubishi has been selling well there and has made… Read more »

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3 months ago

Dominic Matte

Furthermore, Prius have reached 100 000 units in USA after 5 years. All EV togheter were only at 80 000 units after 5 years with plenty of subsidized money…

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3 months ago

john1701a

Good point about subsidies. There were no generous tax-credits back when Prius was new. That didn’t come until *AFTER* achieving annual sales of 100,000 here. That was in 2005. The first tax-credit was offered on January 1, 2006… and phaseout was triggered just 9 months later.

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3 months ago

Nate

Japan helped subsidize the Prius not USA.

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3 months ago

sola

“It was pretty good 20 years ago but has been beaten by diesels for more than a decade.”

Let’s not compare the Prius to massively-polluting, toxic-gas-fuming European diesels, please !!!

They are not remotely in the same category in the eyes of educated, responsible people.

As the example of VW clearly shows, diesels have been spewing 10-40x of the allowed limits from the lung-killing, asthma-inducing, carcinogen emissions. And even the allowed diesel limits were many times the real-life emissions of the Prius. This was pretty much known or at least suspected by knowledgeable people way before the VW scandal.

Prius was never beaten by diesel. Its sales were beaten in Europe by European diesel fuel subsidies and protectionist governments with 10% import tax, fake emission controls leaving loopholes for local automakers, fake NEDC fuel economy testing allowing to advertise unrealistic fuel economy numbers in favor of diesel cars.

It went to the point when it became almost isolated market with EU specific diesel car technology that has no real wide application anywhere else in the world. When VW attempted to force it elsewhere without political cover-up you know what happened.

Now hybrid sales are increasing in Europe again, and it is not just Prius anymore. Almost half of Toyota sales are hybrids there now.

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3 months ago

John Doe

Fuel is NOT sunsidized in Europa AT ALL. There are heavy taxes on fuel in Europe. Only the middle east (oil producers), Venezuela and the US subsidize fuel. I worked a while in Venezuela ( a few years ago), and I paid $2.6 to fill up a 80 liter tank on a Suburban. Back in Norway, I paid $150 to fill up my van with 80 liters. With that price difference you feel violated afterwards. There IS a reason why people in Norway buys EVs like crazy. As for the diesel cars – they sold world wide. Not just that much in the US. The diesel car produce way less CO2 then a gasoline engine.. you know the green house gas.. With proper particle filter and add blue a diesel is quite OK, and it gives a lot of torque with a small engine. The US diesel engines on the other hand did not sell well in Europe, Japan and so on, as they were old fashioned, had huge engine volumes without common rail and so on… but who cares. Fu** diesel and gasoline engines.. Just wait for the filters and add blue like systems coming to direct injection gasoline… Read more »

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3 months ago

Chris O

Prius and the non plug-in hybrids have remained a bit of a side show I think. It’s turned out hard to make one with efficiency numbers that actually appealed to the public. I think only Hyundai recently managed to (almost)match Prius in terms of efficiency. The case for electric cars is much more clear cut. It’s zero emission and a dramatic decline in fuel and maintenance cost, paired with a smooth and potentially high performance ride. EVs should have the power to disrupt hybrids never had.

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3 months ago

john1701a

Camry hybrid delivers 52 MPG from larger, more powerful package… which completely derails that line of reasoning.

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3 months ago

tom dually

Tesla. : ‘the car for people who can’t do math’

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3 months ago

jsantonas

I have my 2012 Prius with over 110K miles on it and still getting 500+ miles out of each 10 gallon gas tank. the only cost I have had to put into it yet has been a 12V battery, after 6 years.
When it is time to get a new one, I will be looking at the Camry hybrid.

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3 months ago

Paul de Wit

Twenty years ago there was far less motivation in the way of regulations and fines for manufacturers to make less environmental damaging cars than there is today,
And the general public seems far more aware of the future environmental implications of driving a guzzler.

The times have changed and will be changing even faster.
I’m excited about it!

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3 months ago

sola

I also expect that emissions regulations will tighten quickly and bans in cities will become widespread.

That should give a huge push to EVs.

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3 months ago

Darth

Hybrid vehicles are nothing like pure EVs. At best they offer a modest improvement in MPG for a higher price and while delivering less power. EVs have none of these drawbacks and in a few years will also be equally or lower priced. The EV experience is also completely different with charging at home.

EVs will dominate the entire car market and hybrids will be a foot note in history.

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3 months ago

jsantonas

If you consider a 30-50% increase in fuel efficiency to be a modest improvement. If you do, better run the numbers EV fanboy.

The hybrid is a wonderful bridge product to the EV but only after EV’s become something other than a running around town vehicle. The EV are extremely high priced, their range sucks and they are not practical for anything other than local usage. That is going to be the case for quite awhile, especially as the materials cost for the existing battery chemistry continue to go up.

And to think, they also have a carbon footprint unlike what the fanboys will have you believe. The present charging stations out on the road are all backed up by the local public utility.

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3 months ago

Don Zenga

More than 4.1 million units of Toyota Prius has been sold, so please change the # from 3.5 million to 4.1 million as its a old news. https://newsroom.toyota.eu/toyota-sells-152-million-electrified-vehicles-in-2017-three-years-ahead-of-2020-target/ Its very common for mainstream media to quote a lower older figure for any hybrid/plugin/electric vehicle sales, but a green media like insideevs should not. Yes lessons are there to be learnt from Prius for Model-3. Gen-1 (1998-2003) as a small sedan sold 120,000 units to prove that the hybrid will work in all seasons and in all climates. Gen-2 (2004-2009) was designed as a hatchback which put it in a midsize category and more improvised hybrid system sold 1.2 million units which is 10 times as much as Gen-1 in the same 6 years. Gen-3 (2010-2015) further improved and sold 2.4 million units. So for Tesla, they just have to redesign Model-3 as a hatchback after 4-5 years and put it in midsize category and this will vault it to higher sales as 5 door vehicles will become more popular by that time. But the reason for the sales dip in Gen-4 Prius has got to do with its design. In reality the current Prius with interior space of 118 cu… Read more »

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3 months ago

Rich Z

The Toyota Gen 4 is ugly. The new rear design is very futuristic. The rocket ship design is not appealing to the American people. The design of the Gen 3 is smooth and flows. The Gen 4 is herkey jerkey. The rear design has hurt their sales. My opinion

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3 months ago

Nix

Tesla Model 3 is already a midsize car, with 114 cu ft of interior space. It doesn’t need a hatchback to be a midsize car.

I am a Prius Gen2 owner but I would not be willing to sit in that monstrosity. Only the Mirai can beat it in ugliness.

Another factor is Toyota’s lackluster progress of further electrification and the negative PR this results among knowledgeable people (traditional home turf for the Prius).

Still no Prius EV on the horizon and the PHEV aer is very low. Also Toyota is spewing bullsh** about EVs and fuel cells which put them back on my list quite a few places.

At this point one is better off with using the current car and waiting for a Model 3 or buying a 2018 Leaf is the need is so pressing. Toyota is just not the company anymore I would like to support with my purchase even if they had the product I want (a durable, quality EV with 150 mi aer).

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3 months ago

Nix

“the first mass-produced gasoline/electric hybrid in an automotive landscape dominated by internal-combustion fuel engines.” — The problem is that the ICE engine STILL produced 100% of the energy, so they never truly broke away from the dominant ICE engine paradigm. The hybrid electric system was still only an assist to the ICE, and you were always still tied to the ICE and gas. It wasn’t a paradigm shift, it was just a twist on the old paradigm with the drawback that they were slow.

No making your own energy to power your car on the roof of your own house.
No freeing yourself completely from dependence on gasoline and being stuck with rising gas prices.
No running completely tailpipe emissions free, without any of the drawbacks of ICE service and noise, etc

Now there are EV’s being built that do all that and more, while adding benefits and performance levels BETTER than gas cars in every way. Adoption will be faster for these EV’s.

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3 months ago

Brandon

I agree with many comments here about EVs having a better chance at disruption than the Prius did. Less maintenance, more power, and no dependence on gasoline at all.

But there is one long term barrier I see that makes it difficult for a good third of U.S. households to drive electric vehicles, and that is availability and access to a plug where they park. Think of apartment dwellers and people who live in cities who have on street parking. Here’s to hoping that these barriers will become a lot less formidable than they are currently for these people.
I know there are a couple ways to get around at home charging, i.e. workplace charging and DCFC, but I can’t see too many EV owners relying just on those two. I could be wrong, especially once there are 200-300 kW ultra fast charging EVs on the market, but I don’t see why mass consumers would settle for that type of charging pattern with its total reliance on a plug where they currently work or available convenient DCFC every few days, not to mention it’s greater cost versus electricity at home or work. Probably 3 times more.

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3 months ago

sola

I think workplace charging and low-power charging at every parking spot will pick up.

I would also expect current gasoline stations try to convert to electric charging with the high-power charging stations you just mentioned but even higher. I expect that 350 kW chargers will be with us pretty soon (Electrify America is already deploying them in numbers).

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3 months ago

Nix

1) Renters don’t buy new cars (ICE or EV’s) at the same rate as home owners. So they will lag behind naturally by around half a decade to a decade.

2) There are apartments where you can charge an EV. They exist. And more apartments are built with EV charging or retrofitted with EV charging every year (especially in the EV mecca California). For now, renters will have to self-select where they rent to select those apartments where they can charge. There is no reason to solve for 100% of apartment dwellers when EV sales are still in the low single digits. That is a future problem.

3) In the future, longer range faster charging EV’s are on their way. These will be able to be charged on a weekly basis more like a gas car, because there won’t be any reason to charge every day, just like you don’t have to top off your gas tank every day. We are already seeing the trend towards this.

4) Urban charge centers, like those Tesla are building will help solve the problem.

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3 months ago

Nate

It is not just ‘Renters’ or ‘Apartment dwellers’ that lack space to charge where they live.

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3 months ago

Nate

It is not just a third of the marketplace that can’t charge at home. It is closer to half.

That study is based off people’s situation at the moment. People don’t want to buy what works at the moment, they want it to work for them for the lifetime they might want to own it. If they do not have confidence they might not move in the next 5-10 years they might be less likely to want to buy an BEV. So percentage of consumers that are not confident an BEV will work well for them, for good reason, is much more than a third.

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3 months ago

john1701a

Looking back at Prius history long afterward often returns a very distorted interpretation of what actually occurred. Most common of errors is to assume the first model-year sold in the United States was a full year. In reality, sales began the last week of August 2000. So, all reports of demand are incorrect due to misrepresentation of time. Confusing matters more was the fact that Prius could only be obtained 2 ways back then. Either you placed an order online and waited 6 to 9 months for delivery or you got really lucky and were able to purchase a demo-model. Keep in mind that inventory on dealer’s lots did not become available until May 2002. So, all reports of demand are incorrect due to misrepresentation of supply. Complicating the situation even beyond that mess is the fact that Toyota only allocated specific quotas for each year of sales. That meant demand could never be accurately gauged during that entire generation. In other words, if you weren’t blogging about those events as they played out (like I did), you may not have an accurate understanding of what really happened. There is much detail people are not aware of.

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3 months ago

Pushmi-Pullyu

It’s just my personal viewpoint, but I see Toyota as the BlackBerry of the EV revolution, and Tesla as Apple. Just like BlackBerry, Toyota let its EV tech grow stale, frittering away its years of lead time in the market. When the first iPhone was released, BlackBerry made only a half-hearted effort to match the iPhone’s touchscreen controls. After a few years, BlackBerry had lost most of the smartphone market it once dominated. Similarly, Toyota’s response to Tesla has been at best half-hearted. The first generation Prius Plug-in had no better electric range than what you could get by adding a third party conversion kit for existing Prii (Priuses), and this year’s Prius Prime, at only 25 miles of electric range, isn’t much better. GM started selling the Volt at the end of 2010 with 35 miles of range, and 8 years later Toyota can’t even match that! Now, that’s not to say that within a few years, Toyota will have only a pale shadow of its current market share, as BlackBerry does. But Toyota had better get serious about making and selling compelling PEVs (Plug-in EVs), or else within a human generation it’s going to join the very long… Read more »

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3 months ago

sola

Pretty much this.

Also, it would be nice if they stopped spewing bullsh** about EVs and FCVs because that just alienates a fair portion of their possible customer base.

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3 months ago

Nate

Tesla has not cut into Toyota’s overall profit or vehicle market share anywhere like Apple quickly cut into Blackberry’s business.

At the point the iPhone lainched Apple was doing pretty well and was on an upswing already. Macbook were being seen as cooler than Windows laptops, and Apple had shaken up the music industry with iPods and iTunes. They had ways to make profit besides the iPhone. This seems very different than Tesla’s situation.

I would rather own a Tesla than a Toyota, but I like Toyota’s chances of being around 20 years from now more than Tesla. That is NOT saying I do not want Tesla to be around.

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3 months ago

Tom Dually

I’d think the Corvair is a better example.
Unsafe at any speed instead of ‘cannot see fire trucks’

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3 months ago

John Doe

Those 20 years are almost gone. I used a Think City car at a company I worked for in 2003, and later the new Think City in 2007 ish.. looked like this:

and these were not even the worst EVs at the time.. but the battery tech was cr*p, until they came with a lithium battery – but by then it was too late. They had too many production and development stops due to going bust several times.
New battery was like $10.000 so most of these EVs are scrapped by now – at for sale for peanuts.

EVs will start to sell in volumes in 2020-2022, and from then on, slowly eat away ICE market share. A few years later, most cars will be EVs if batteries can be made cheaper.